Compare credit options for purchasing a condominium online and save up to 20,000 euros
6 May 2025
7
Minutes
Katrin Straub
CEO at nextsure
The dream of owning your own home begins with solid financing. However, a rash decision to secure a loan can cost you tens of thousands of Euros over the term. Discover how a systematic online comparison can help you secure the best terms for your loan to purchase an apartment.
The topic in brief and concise terms
A difference in interest rates of 0.5 percentage points can amount to more than 15,000 euros over the course of a 300,000 euro loan.
Look out for flexible contract options like free special repayments of up to five percent annually and the possibility to change the repayment rate.
Plan for at least 20 per cent of the purchase price plus all additional costs (around 10-15 per cent) as equity to secure the best interest rates.
Identify interest rate differences as the primary cost lever
The interest rates for a ten-year home loan are currently averaging 3.4 percent. Even a difference of just 0.5 percentage points can mean a saving of more than 15,000 euros on a loan amount of 300,000 euros over 15 years. Banks assess your risk individually, which is why offers can vary by up to one percentage point. A comprehensive comparison of home loans is therefore the first step towards significant savings. The ECB's key interest rate has a direct impact and stands at two percent in July 2025, affecting banks' refinancing costs. This market dynamic underscores the necessity to actively compare offers rather than merely accepting the first offer from your main bank. This way, you lay the foundation for a sustainable and cost-efficient financing of your dream property.
Strategically evaluate contract details beyond the target interest rate
A favourable interest rate is only part of the equation; the flexibility of your contract is equally crucial. Look for free additional options that secure long-term financial leeway for you. Many banks offer valuable, flexible contract components.
A list of important options includes:
Special repayments: The ability to repay up to five per cent of the remaining debt free of charge annually significantly shortens the term.
Repayment rate change: There should be at least two free changes to the repayment rate during the fixed interest period, allowing you to respond to changes in income.
Long fixed interest period: In times of low interest rates, a commitment of 15 or 20 years provides a high level of planning security against interest rate change risks.
Interest-free period for provision: Secure at least twelve months during which the bank does not charge interest on the loan amount that has not yet been drawn.
These options may cost an interest surcharge of 0.01 to 0.05 percentage points, which often pays off. A well-considered follow-up financing takes these factors into account from the very beginning. A careful examination of these details distinguishes a good loan offer from an excellent one.
Use equity and ancillary costs as the foundation of financing
A solid equity base is your strongest argument for securing top conditions. Banks recommend covering at least 20 to 30 per cent of the total costs with your own funds. The incidental purchase costs, which vary between nine and 15 per cent of the purchase price depending on the federal state, should be fully covered by equity. These incidental costs consist of the property transfer tax (3.5 to 6.5 per cent), notary and land registry fees (around two per cent), and potential estate agent fees. Those who contribute more than 30 per cent equity can expect an interest rate reduction of up to 0.5 percentage points. A mortgage without equity is indeed possible, but it leads to significant interest surcharges. Therefore, a precise calculation of your budget is essential.
Master the online comparison process in four steps
A structured approach is key to comparing the best loan for purchasing a condominium online. Follow these four steps to stay on track and make an informed decision.
Here’s how to proceed systematically:
Determine your budget precisely: Create a detailed budget plan to establish your maximum monthly payment. Include a buffer of at least 15% for unexpected expenses.
Gather all documents: Prepare all credit and property documents, including the last three payslips, proof of equity, and the draft purchase contract.
Compare offers widely: Use at least two different online platforms to access a broad range of offers from over 100 banks, insurers, and building societies.
Check the terms in detail: Consider not just the effective interest rate but all contract details like special repayment options and the interest-free period for provisioning.
Our expert tip: Always obtain a SCHUFA credit report before making inquiries to correct any incorrect entries. This can improve your credit rating by more than ten percent. With these steps, you ensure control over the entire process.
Apply expert knowledge for legal protection and interest optimisation
Beyond the standard conditions, there are legal frameworks and financial instruments that can offer you significant advantages. The Bürgerliches Gesetzbuch (BGB), for example, provides you with a strong right to terminate. According to Paragraph 489 BGB, you can terminate any loan agreement with a fixed interest rate for more than ten years after the expiration of ten years—without an early repayment penalty—with a notice period of six months. This is an excellent opportunity for refinancing at lower interest rates. Our expert tip: Secure today's interest rates for your follow-up financing in up to 66 months with a forward loan. This involves a small interest premium of approximately 0.02 percent per month of lead time but protects against interest rate increases of one percentage point or more. Thus, you make use of the legal possibilities to your financial advantage.
Request a personalised risk analysis now
Careful planning and comparing your loan for purchasing an apartment lays the foundation for your financial future. You've seen that even small details in the contract can determine tens of thousands of euros. Use this knowledge to avoid pitfalls and find the optimal financing for you. Have your insurance situation checked free of charge and receive specific optimisation suggestions to fully secure your new property from the outset.
More useful links
Statistisches Bundesamt provides information on construction prices and real estate price indices in Germany.
Statistisches Bundesamt offers tables with data on house prices and land prices in Germany.
The Deutsche Bundesbank provides an indicator system for the residential real estate market.
The Verbraucherzentrale offers articles about construction and real estate financing.
The KfW provides information on the Home Ownership Programme (124) for promoting home ownership.
The Deutsche Bundesbank provides statistics on interest rates and yields for residential construction loans to private households.
The ifo Institute publishes a press release on expected high price increases for real estate worldwide.
FAQ
How long should the interest rate be fixed for my mortgage?
In a phase of historically low interest rates, it is advisable to have a long fixed-interest period of 15, 20, or more years. This allows you to secure favourable conditions for a long term and protect yourself from the risk of rising interest rates during refinancing.
What is the difference between the nominal interest rate and the effective interest rate?
The nominal interest rate (formerly known as the nominal rate) refers to the basic costs of the loan. The annual percentage rate includes not only the nominal interest rate but also additional costs such as processing fees, and is therefore the more meaningful figure for comparing loan offers.
How many loan offers should I compare?
You should obtain at least three to five different offers. It is best to use online comparison portals that access a wide range of banking partners to get a comprehensive market overview and compare the terms objectively.
Is a special repayment always worthwhile?
Yes, if it is agreed upon free of charge in the contract. Any prepayment reduces the remaining debt, shortens the term, and lowers the total interest costs. Even small amounts of 1,000 or 2,000 euros per year can result in savings of several thousand euros over the term.
What documents are most important for the loan application?
The most important documents are proof of income (the last three payslips), proof of equity (bank statements), and property documents (draft purchase agreement, land register extract, floor space calculation). A complete and tidy preparation significantly speeds up the approval process.
Can I include the incidental costs in the financing?
Financing of incidental costs (110% financing) is rare and only possible with excellent creditworthiness and very secure income. It leads to significantly higher interest rates as the risk for the bank increases. It is strongly recommended to pay the incidental costs from your own capital.
